BAM Key Details: 

  • Last week, rumors surfaced that the National Association of Realtors (NAR) had depleted its insurance coverage for antitrust lawsuits.
  • NAR’s Deputy General Counsel, Lesley Muchow, confirmed in an email that the organization has indeed reached its $1 million coverage limit for lawsuits challenging cooperative compensation practices on MLS platforms.

Last week, Notorious ROB shared hearsay from a Realtor association executive: The National Association of Realtors had run out of insurance coverage for antitrust lawsuits. 

Turns out, it wasn’t just a rumor.  

The next day, sources told HousingWire that NAR did, in fact, reach its limit for liability insurance funds. 

This week, any lingering doubt was put to rest, as NAR confirmed the rumors. Lesley Muchow, NAR’s Deputy General Counsel & Vice President of Legal Affairs and Antitrust Compliance, answered questions about the organization’s liability insurance in the email, as first reported by Inman.  

NAR’s Liability Insurance Hit its $1M Limit

In the email, Muchow confirmed that  “For lawsuits challenging cooperative compensation practices on the MLS, NAR has reached our maximum coverage limit of $1 million under NAR’s primary policy.” 

This limit was met “some time ago,” according to the email, since its insurance provider Chubb “determined that the copycat lawsuits challenging cooperative compensation “relate back” to NAR’s original 2019 claim under the 2019 Chubb professional liability policy.”

NAR continues to maintain coverage for other types of claims, but coverage for suits related to cooperative compensation is no longer available under its primary policy.

Since the Sitzer/Burnett verdict was announced in October, numerous copycat lawsuits have been filed against NAR and Realtor associations across the country. Potential damages from these cases could exceed billions of dollars. 

Despite the insurance coverage limit, NAR’s email assures that state and local associations with additional insurance can still access excess coverage for litigation related to cooperative compensation. 

NAR remains committed to supporting associations named in lawsuits, collaborating to evaluate their circumstances and explore available options for assistance.

Muchow’s Email to Realtor Associations

Here is NAR’s full email to state and local Realtor associations:

As many of you know from our regular NAR insurance program education resources, as well as the overview video and FAQ available on nar.realtor, NAR’s insurance policy with Chubb offers coverage for certain claim types. The cost to defend antitrust claims is one of those claim types (but liability for antitrust claims has not historically been covered).

I’m writing to again answer questions about that insurance coverage that I have heard recently, and to dispel rumors and misconceptions. Here are the facts.

  • NAR’s insurance has not changed.
  • For antitrust defense, NAR and associations and MLSs who have not acquired excess insurance long have had a $1 million coverage limit. For lawsuits challenging cooperative compensation practices on the MLS, NAR has reached our maximum coverage limit of $1 million under NAR’s primary policy. Chubb, our insurance provider, determined that the copycat lawsuits challenging cooperative compensation “relate back” to NAR’s 2019 claim under the 2019 Chubb professional liability policy. That means the primary coverage from NAR’s insurance program does not cover state and local associations’ or MLSs’ defense expenses in these cases.
  • NAR also has recommended that associations and MLSs avail themselves of excess coverage that NAR made available. Associations and MLSs that purchased this excess antitrust coverage may have available coverage.

Access to insurance coverage is not the only way NAR provides support in connection with the cooperative compensation lawsuits.

  • NAR has worked for years to resolve the cases related to cooperative compensation.
  • NAR continues to work on solutions for our associations and their MLSs.
  • NAR provides legal support to associations and MLSs through its inside and outside counsel.
  • NAR’s counsel has represented associations and MLSs when it can.

As the state and local associations named in these lawsuits know, NAR is committed to supporting any association named in a copycat lawsuit. We have worked, and continue to work, with named associations to evaluate their particular circumstances and explore options to assist them.

Below are some Q&As.

If you have any questions, please don’t hesitate to contact me (lmuchow@nar.realtor) or NAR’s Senior Counsel Deanne Rymarowicz (drymarowicz@nar.realtor).

Lesley

Q&A

  1. Did NAR change its insurance?
  • No.
  • For antitrust defense, NAR and associations and MLSs who have not acquired excess insurance long have had a $1 million coverage limit. For lawsuits challenging cooperative compensation practices on the MLS, NAR has reached our maximum coverage limit of $1 million under NAR’s primary policy.
  1. Did NAR lose its insurance?
  • No.
  • NAR renews its insurance policy annually.
  • We are working to extend the current policy and hope to have more to share soon.
  1. Is it accurate that NAR’s liability insurance has run out and there will be no coverage available to state and local REALTOR® associations to pay for the cost of defending the cooperative compensation suits?
  • NAR’s liability insurance has not run out. However, it is accurate that we have reached our maximum coverage limit of $1 million for lawsuits challenging cooperative compensation practices on the MLS. Coverage for other types of claims is still available.
  • Chubb, our insurance provider, determined that the copycat lawsuits challenging cooperative compensation “relate back” to NAR’s original 2019 claim under the 2019 Chubb professional liability policy.
  • NAR has recommended that associations and MLSs avail themselves of excess coverage that NAR made available. Associations and MLSs that purchased this excess antitrust coverage may have available coverage.
  1. What was the insurance limit and when did NAR hit it?
  • The maximum coverage limit in our 2019 policy for the claim related to the cooperative compensation lawsuits was $1 million.
  • We reached the limit some time ago.
  1. Why isn’t coverage from the Chubb policies in 2022-2024 available to pay defense costs?
  • Chubb, our insurance provider, determined that the copycat lawsuits challenging cooperative compensation “relate back” to NAR’s original 2019 claim under the 2019 Chubb professional liability policy.
  1. What is NAR doing for state and local associations named in copycat lawsuits?
  • NAR has recommended that associations and MLSs avail themselves of excess coverage that NAR made available. Associations and MLSs that purchased this excess antitrust coverage may have available coverage.
  • Access to insurance coverage is not the only way NAR provides support in connection with the cooperative compensation lawsuits.
  • NAR has worked for years to resolve the cases related to cooperative compensation.
  • NAR continues to work on solutions for our associations and their MLSs.
  • NAR provides legal support to associations and MLSs through its inside and outside counsel.
  • NAR’s counsel has represented associations and MLSs when it can.
  • As the state and local associations named in these lawsuits know, NAR is committed to supporting any association named in a copycat lawsuit. We have worked, and continue to work, with named associations to evaluate their particular circumstances and explore options to assist them.